Debt

The following table presents the Company’s debt as of March 31, 2017, and December 31, 2016 (in thousands):



			Outstanding Principal Balance
	Interest Rate (1)	Maturity Date	March 31, 2017			December 31, 2016
AH4R 2014-SFR1 securitization (2)	2.52%	June 9, 2019	$	455,385		$	456,074
AH4R 2014-SFR2 securitization	4.42%	October 9, 2024	500,527			501,810
AH4R 2014-SFR3 securitization	4.40%	December 9, 2024	516,144			517,827
AH4R 2015-SFR1 securitization (3)	4.14%	April 9, 2045	542,099			543,480
AH4R 2015-SFR2 securitization (4)	4.36%	October 9, 2045	470,849			472,043
Total asset-backed securitizations			2,485,004			2,491,234
Exchangeable senior notes	3.25%	November 15, 2018	115,000			115,000
Secured note payable	4.06%	July 1, 2019	49,583			49,828
Revolving credit facility (5)	2.73%	August 16, 2020	—			—
Term loan facility (6)	2.68%	August 16, 2021	350,000			325,000
Total debt (7)			2,999,587			2,981,062
Unamortized discount on exchangeable senior notes			(1,656		)	(1,883		)
Equity component of exchangeable senior notes			(4,356		)	(4,969		)
Deferred financing costs, net (8)			(49,479		)	(51,636		)
Total debt per balance sheet			$	2,944,096		$	2,922,574


(1)	Interest rates are as of March 31, 2017. Unless otherwise stated, interest rates are fixed percentages.

(2)

The AH4R 2014-SFR1 securitization had a duration-weighted blended interest rate of 1-month LIBOR plus 1.54%, subject to a LIBOR floor of 0.25%. The maturity date of June 9, 2019, reflects the fully extended maturity date based on an initial two-year loan term and three 12-month extension options, at the Company’s election, provided there was no event of default and compliance with certain other terms. This securitization was paid off in full during April 2017.


(3)	The AH4R 2015-SFR1 securitization has a maturity date of April 9, 2045, with an anticipated repayment date of April 9, 2025.


(4)	The AH4R 2015-SFR2 securitization has a maturity date of October 9, 2045, with an anticipated repayment date of October 9, 2025.

(5)

The revolving credit facility provides for a borrowing capacity of up to $650.0 million, with a fully extended maturity date of August 2020, and bears interest at a LIBOR rate plus a margin ranging from 1.75% to 2.30% or a base rate (generally determined according to a prime rate or federal funds rate) plus a margin ranging from 0.75% to 1.30%. The interest rate stated represents the applicable spread for LIBOR based borrowings as of March 31, 2017, plus 1-month LIBOR.

(6)

The term loan facility provides for a borrowing capacity of up to $350.0 million, with a fully extended maturity date of August 2021, and bears interest at a LIBOR rate plus a margin ranging from 1.70% to 2.30% or a base rate (generally determined according to a prime rate or federal funds rate) plus a margin ranging from 0.70% to 1.30%. The interest rate stated represents the applicable spread for LIBOR based borrowings as of March 31, 2017, plus 1-month LIBOR.


(7)	The Company was in compliance with all debt covenants associated with its asset-backed securitizations, secured note payable, revolving credit facility and term loan facility as of March 31, 2017, and December 31, 2016.


(8)	Deferred financing costs relate to our asset-backed securitizations and our term loan facility. Amortization of deferred financing costs was $2.2 million and $2.1 million for the three months ended March 31, 2017 and 2016, respectively, which has been included in gross interest, prior to interest capitalization.

Early Extinguishment of Debt

In April 2017, the Company paid off the outstanding principal on the AH4R 2014-SFR1 asset-backed securitization of approximately $455.4 million using proceeds from the Class A common share offering in March 2017 and available cash, which resulted in approximately $6.6 million of early extinguishment of debt charges primarily related to the write-off of unamortized deferred financing costs. The payoff of the AH4R 2014-SFR1 asset-backed securitization also resulted in the release of the 3,799 homes pledged as collateral and $4.8 million of restricted cash for lender requirements.

Exchangeable Senior Notes, Net

The exchangeable senior notes, which were assumed in connection with the Company's merger with American Residential Properties, Inc. ("ARPI") (the "ARPI Merger") during 2016, are senior unsecured obligations of the operating partnership and rank equally in right of payment with all other existing and future senior unsecured indebtedness of the operating partnership. The operating partnership’s obligations under the exchangeable senior notes are fully and unconditionally guaranteed by the Company. The exchangeable senior notes bear interest at a rate of 3.25% per annum and contain an exchange settlement feature, which provides that the exchangeable senior notes may, under certain circumstances, be exchangeable for cash, shares of our common stock or a combination of cash and shares of our common stock, at the option of the operating partnership, based on an initial exchange rate of 46.9423 shares of ARPI's common stock per $1,000 principal amount of the notes. The adjusted initial exchange rate would be 53.2795 shares of our common stock per $1,000 principal amount of the notes, based on the 1.135 exchange ratio of ARPI shares to our shares resulting from the ARPI Merger. The current exchange rate as of March 31, 2017, was 54.8933 shares of our common stock per $1,000 principal amount of the notes. The exchange rate changes over time based on our common share price and distributions to common shareholders.

As of March 31, 2017, the exchangeable senior notes, net had a balance of $109.0 million in the condensed consolidated balance sheets, which was net of an unamortized discount of $1.7 million and $4.4 million of unamortized fair value of the exchange settlement feature, which was included in additional paid-in capital within the condensed consolidated balance sheets.

Credit Facilities

In August 2016, the Company entered into a $1.0 billion credit agreement providing for a revolving credit facility in an aggregate principal amount of $650.0 million and a delayed draw term loan facility in an aggregate principal amount of $350.0 million. The interest rate on the revolving credit facility is, at the Company’s election, a LIBOR rate plus a margin ranging from 1.75% to 2.30% or a base rate (generally determined according to a prime rate or federal funds rate) plus a margin ranging from 0.75% to 1.30%. Loans under the term loan facility accrue interest, at the Company’s election, at either a LIBOR rate plus a margin ranging from 1.70% to 2.30% or a base rate plus a margin ranging from 0.70% to 1.30%. In each case, the actual margin is determined according to a ratio of the Company’s total indebtedness to total asset value in effect from time to time. Based on current credit metrics for LIBOR-based borrowings as of March 31, 2017, the revolving credit facility bears interest at 1-month LIBOR plus 1.75%, and the term loan facility bears interest at 1-month LIBOR plus 1.70%. The credit agreement includes an accordion feature allowing the revolving credit facility or the term loan facility to be increased to an aggregate amount not to exceed $1.75 billion, subject to certain conditions. The facilities mature on August 16, 2019. No amortization payments are required on the term loan facility prior to the maturity date. The Company has the option to extend the maturity date of the revolving credit facility for up to one year, and has two options to extend the maturity date of the term loan facility for up to one year each, in both cases upon payment of an extension fee. The credit agreement requires that we maintain certain financial covenants. As of March 31, 2017 and December 31, 2016, the Company had no outstanding borrowings against the revolving credit facility, $350.0 million and $325.0 million, respectively, of outstanding borrowings against the term loan facility and was in compliance with all loan covenants.

Interest Expense

The following table displays our total gross interest, which includes unused commitment and other fees on our credit facilities and amortization of deferred financing costs, the discounts on the ARP 2014-SFR1 securitization and exchangeable senior notes and the fair value of the exchange settlement feature of the exchangeable senior notes, and capitalized interest for the three months ended March 31, 2017 and 2016 (in thousands):



	For the Three Months Ended
	March 31, 2017			March 31, 2016
Gross interest	$	32,492		$	31,613
Capitalized interest	(603		)	(636		)
Interest expense	$	31,889		$	30,977